Introduction Flashcards
What term best describes the federal social security tax rate structure?
Regressive. Regressive generally means that as income or wages increases, the rate of tax decreases. Since the federal social security tax is capped (i.e., $117,000 in 2014) so the rate decreases to zero, the tax is considered regressive.
True or False: US Treasury regulations are generally the most important and primary source of tax law.
FALSE. Although US Treasury regulations can be a very important source of tax law, the Internal Revenue Code (IRC) is the most important and primary source of tax law. US Treasury Regulations will generally only be consulted if the IRC does not provide a clear answer.
What term best describes the US Federal income tax rate structure
Progressive. Progressive generally means that as income increases, the percentage increase in tax is greater rate than the percentage increase in income. Thus, in the case of an income tax system, a tax rate structure is progressive if the tax rates increase as income increases (e.g., the US federal income tax rate structure).
If you want to obtain detail on the tax proposals included in the President’s annual budget, which document would be best to review?
The Green Book is issued as part of the President’s annual budget proposals. Both names are derived from the color of the book’s cover. Thus, you should review the Green Book. The Blue Book is produced by the Joint Committee of Taxation after legislation is enacted.
True or False: If you want to obtain detail on the tax proposals included in the President’s annual budget, you should review the so-called Blue Book.
The Blue Book is produced by the Joint Committee of Taxation after legislation is enacted. The correct answer to this question is the Green Book which is issued as part of the President’s annual budget proposals. Both names are derived from the color of the book’s cover.
True or False: The Staff of the Joint Committee of Taxation must vote on all federal tax legislation
False. Although the JCT staff are very important players in the federal tax legislative process, they are only staff and they do not vote. Rather, the JCT staff provides analysis of legislation, including both technical analysis and revenue estimates. Typically, the House Ways & Means Committee and the Senate Finance Committee vote on tax legislation, but even they do not vote on all federal tax legislation. For example, it is possible that proposed tax legislation could be inserted into legislation on the floors of the House or Senate.
What are the two key tax writing committees in the US Congress?
House of Representatives = Ways & Means Committee Senate = Finance Committee
True or False: Court cases are generally the most important and primary source of tax law.
Although case law can be important in tax law, the Internal Revenue Code (IRC) is the most important and primary source of tax law.
